RPT-UPDATE 1-Linde Q3 profit tops forecast as demand picks up

(Repeats to widen distribution)

* Oper profit 637 mln eur vs Reuters poll 618 mln

* Linde says gas business starts to improve slowly

* Still sees 2009 earnings down vs 2008

MUNICH, Nov 2 (Reuters) - Linde (LING.DE), the world's number 2 industrial gas producer, posted a smaller-than-expected fall in third-quarter operating profit and said demand had started to recover slowly.

Linde said on Monday earnings before interest, tax depreciation and amortisation (EBITDA) excluding one-off items fell 2.3 percent to 637 million euros ($944.2 million), with the decline cushioned by cost cuts that were speeded up this year.

The figure was higher than the 618 million average forecast in a Reuters poll. [ID:nLS40111]

Linde had said this year's earnings would benefit from gross cost savings of 200 million euros as well as from 250 million euros in synergies from its acquisition of rival BOC.

Analysts had expected the sector to pick up in the third quarter compared with the second due to strong demand in emerging markets such as China and a higher output in large industries such as chemicals, steel and refinery.

Linde continues to see lower sales and earnings this year compared with last year.

Linde's comments came after the CEO of Air Liquide, the top gas maker, said on Oct. 22 that he was confident for the next six to 12 months and that the increase in volumes compared with the second quarter was noticeable. [ID:nWEA6294] [ID:nLL242297]

U.S rival Air Products and Chemicals Inc (APD.N) Chief Executive John McGlade has said the company was seeing volume improvement sequentially in all its businesses. [ID:nN21482255]

(Reporting by Frank Siebelt; Writing by Marilyn Gerlach; Editing by Erica Billingham)